Real-World Serialization

Vendor-sponsored events in 2016 are bringing pharmaceutical manufacturers, contract packagers, and contract development and manufacturing companies (CDMOs) together to discuss their mutual needs, global regulatory issues (particularly requirements for the Drug Supply Chain Security Act [DSCSA]), and supply chain partner demands.

Optel, Systech, and TraceLink have all begun to present conferences designed to bring operating companies and contract partners together to discuss serialization challenges. TraceLink’s Summer 2016 conferences took place on both the East and West coasts of the United States. Their goal is to have different supply-chain partners share insights into visibility and traceability and technical challenges, and gain perspective on customer needs, says Brian Daleiden, Tracelink’s vice-president of industry marketing.

Despite 2017 deadlines for DSCSA, a small fraction of small pharma companies are still taking a “wait-and-see” approach, Daleiden says, but most have become much more proactive. Big Pharma is pushing its contract partners to plan investments, and virtual companies are no longer waiting for their partners to initiate action. “We’re seeing much more of a dialogue [between pharma sponsors and contract companies] now,” Daleiden says.

Standards advanced by Global Supply Chain Standard 1 (GS-1) and its Electronic Product Code Information Service (EPCIS) are helping the effort, experts agree. Another encouraging trend, says Brandon Beltz, director of global serialization for Pfizer, is that contract manufacturing organizations (CMOs) are taking part in these programs. “Smaller CMOs are starting to realize that serialization is a ‘today’ problem, and no longer two years away,” Beltz says, noting the need for shared perspectives and information. “There is still a lot of work that the industry must do between now and 2017, and a variety of bumps may come up along the way that are difficult to anticipate before an organization is fully engaged in serialization readiness activities.”

Leading pharma distributors are becoming more open about their business and traceability requirements, Daleiden says, and aligning those requirements. For instance, they are requiring that manufacturers create and provide them with aggregated information for the serialized products they make, so there is a need for initial data on the relationship between serialized and aggregated product. “They need to ensure that product is in sealed cases, since they cannot break up cases to scan it.”

Another issue is saleable returns. Once they receive products, distributors will need to verify the Standard Network Interface (SNI) before they can resell them.  Currently, distributors estimate that they receive more than 58 million saleable units per year. For 2019, says Daleiden, they will need to be able to verify product, at operational speeds, before commingling, to know whether they can accept it.

The industry is now testing scenarios for meeting DSCSA requirements and querying manufacturers, he says. “You don’t just need serial numbers, but an understanding of the relationship between units and boxes and cases, and data will have to be shared downstream with third-party logistics companies and wholesaler distributors,” he says.

“EPCIS is moving toward Version 1.2 of a data-exchange standard that will help with aggregation return, queries, and verification,”Daleiden says. Meanwhile, pilot projects are testing operating principles and best practices, and connecting nodes along the supply chain. “Most critical is managing exceptions,” says Daleiden, “since there are so many more types of exceptions in a serialized environment.”

Experts from a large contract packager (Sharp Services), a large pharma CDMO (Patheon), a mid-sized CDMO (Recipharm), a small CMO (Saneca Pharma), as well as technology vendors (see Sidebar) shared their insights with Pharmaceutical Technology for this article, which examines progress they are making in serialization efforts and beyond.

Collaborating for success

Gaurav Banerjee, Director of Technical Services, Sharp Packaging Solutions

PharmTech: When did you start thinking about going beyond serialization and working toward broader traceability and track-and-trace goals?

Banerjee: We started our serialization work in 2008, and we have been engaged in the ‘broader traceability’ effort for a number of years now. We’ve exchanged data with downstream trading partners, and provided data to an EPCIS that enables authentication at point of dispense.

Of course, serialization needs to be adopted by all pharmaceutical manufacturers and distributors/wholesalers in order to enable true supply chain visibility as intended by the DSCSA by 2023.

PharmTech: What percentage of your clients demand serialization and track-and-trace services? Are any using their own systems?

Banerjee: Currently only about 25-30% of our customers are requiring serialization, as early adopters, but we’ll need to serialize the products of nearly 100% of our customers in order to meet regulatory compliance requirements by November 2017.
Manufacturers generally choose to invest in their own serialization capabilities for bread and butter products, but outsource serialization for lower volume products or more-complex serialization work (e.g., for autoinjector pens). Virtual pharma outsources all this work.

PharmTech: Do customers understand the investment required, or do they take this for granted?

Banerjee: Generally, there is much more to serialization than people realize. We provide this as a service and charge a usage fee (analogous to a hotel charging customers only for the nights customers stay there). It is a different story if customers want a long-term arrangement, in which case customers help pay for capital outlay.  If they’re just running it on 10,000 bottles, they pay for the time required. For us, it is a cost of doing business, but customers are learning, as the automotive industry had to learn when companies had to invest in safety requirements such as air bags and seat belts. It has been alarming to think about the number of pharma companies that have not yet developed firm serialization plans.

PharmTech: How have you balanced the need to be flexible and adapt to very different client needs, and yet be able to meet global deadlines for serialization?

Banerjee: As a contract packaging organization that has to onboard over 100 customers for serialization within deadlines, we have had to focus on flexibility, which led us to standardize on a few key line and package configurations and select technology partners who could provide support at all locations.

We have established a Sharp standard offering for serialization that our customers may choose to adopt for rapid enablement or we can customize the service provided to the extent our customers desire, as we have solid technical expertise to work through a number of different options. We work with a number of vendors including Systech, Covectra, and TraceLink.

Serialization success stories

PharmTech: Can you give some examples of ‘success stories,’ or projects that achieved success with serialization and track and trace, what they taught you, and why they worked?

Banerjee: In one case, we had a project that involved four levels of aggregation, from pouches to cartons to cases to pallets on a high-speed line, running approximately 330 pouches per minute.

As Sharp’s foray into commercial serialization for a high- volume product, this set of three identical lines, implemented between 2009 and 2012, taught us valuable lessons in terms of the correlation between the physical packaging of products and the data/electronic trail that needs to be maintained with serialization.

Another project entailed five levels of aggregation, from individual blister cavity to blister card to carton to case to pallet. This high-speed application presented unprecedented challenges in aggregating data at 900 Serial Numbers per minute. Sharp overcame the technical challenge with the help of a few key technology partners, and now produces a product that is the first of its kind in the industry, having serialization down to the individual dose with aggregation all the way through the pallet level. The main lesson learned from this project was how things are affected when serializing at high speed, when you have to maintain data integrity at rates that put high demands on computer systems.

Another example involved bottle serialization, with bottle to case-to-pallet aggregation. When you print numbers on a carton, and inspect that box as it travels on a conveyor, camera positioning is a relatively straightforward exercise.  Having to scan a bottle label on a round bottle, however, presents orientation challenges from the bottle to the vision system.

Again, working with key technology partners and having a skilled engineering staff helped Sharp overcome this challenge and turn it into a ‘standard’ solution that can now be deployed on multiple lines as we scale up to support serialization demand.

PharmTech: Have you been able to quantify and demonstrate return on investment (ROI) through these projects?

Banerjee: There’s more of an opportunity cost rather than ROI consideration for a contract packaging organization (CPO) with serialization, in the strict financial sense, i.e., if we can’t provide it, and our competitors can, where does that leave us in 15 months when it’s required by law?

Serialization is becoming the cost of doing business in the pharmaceutical packaging industry, not only for packagers, but also potentially for the customers we serve, depending on how the costs are shared and absorbed contractually. However, it does provide the economic advantage to product manufacturers of allowing them to be able to trace movement of product in their supply chains to a more granular level, and, hence, prevent costly waste of drug product.

Education and collaboration

PharmTech: Are there aspects of serialization and the scope of work required that clients still do not understand?

Banerjee: Yes, absolutely. Many think serialization is simply printing numbers on packaging. What goes into generating, storing, capturing, and conveying those numbers is not well understood. As the industry becomes better versed in the computerized systems and the IT-related aspects of serialized packaging, there will no doubt be a better grasp of the effects of serialization on pharmaceutical packaging.

PharmTech: What have you found to be the most difficult challenges involved with serialization?

Banerjee: The most difficult technical challenge at this time has to do with the exchange of serial number data, and associated master/meta-data for packaged product lots.  Since there is no universally accepted standard for the interoperability of computer systems used for track and trace, the ‘data mapping’ effort often requires a good bit of attention and effort. Perhaps the most challenging non-technical issue is the availability of sufficiently qualified resources to deploy serialization on packaging lines.

PharmTech: Which national set of regulations is proving the most challenging to meet and why?

Banerjee: Brazil’s (now temporarily redacted) ANVISA regulation is significantly challenging, because it has required randomization across global trade item numbers (GTINs), which distinguish one item from the next in the supply chain/market.  
Having to track which serial numbers are acceptable to use with a particular GTIN, rather than being able to select numbers from a pool or repository, regardless of the GTIN with which they are to be associated, requires careful data management, especially when the same product is manufactured at more than one company and location.

PharmTech: What role will standards play in overall traceability assurance?

Banerjee: Harmonization on globally accepted interoperability standards will be key to the full traceability of pharmaceutical products in the future.

PharmTech: How can pharma clients help ensure the success of serialization programs?

Banerjee: Start early, listen to those with experience, and collaborate with them. Choose technology vendors based on future needs, considering the possibility of expanded use of serialized data. A GS-1 company prefix, product GTINs, SN format, and artwork/space are some of the main elements that need to be communicated to service providers.

2017 deadlines looming: will capacity meet demand?

PharmTech: Given that so many pharma companies delayed starting serialization projects, do you expect an industry shortage of resources and capacity to handle requirements?

Banerjee: We definitely see a tidal wave coming our way, but we like to believe that we are equipped for it since we got started with serialization early on. If we can convert our existing customer base within the next year, we can accept additional requests as the deadline approaches. We are working to equip ourselves to handle demand. This is another reason why we have established solid relationships with vendor partners.

We’ve been able to improve project delivery timelines.  Five years ago, eight months was the norm, now it’s threemonths. Standardized systems and processes have made this possible.

A focus on standards for flexibility

Chris Howell, senior director, global engineering and technology, and global serialization program manager, Patheon

PharmTech: How long has Patheon been working on serialization, and track and trace initiatives?

Howell: Patheon started serialization efforts in early 2015 as a response to early market requirements such as China and South Korea. Our efforts initially began with select packaging sites in our network and have since expanded to all sites having the capability to perform applicable finished good packaging.

PharmTech: When did you start thinking about going beyond serialization and working toward broader traceability/track-and-trace goals?

Howell: From early on in our efforts, we’ve been pursuing additional goals to provide full aggregation to aid in downstream traceability efforts. Our sites that are currently serializing also include aggregation. This will be a core element of new lines as additional sites come on-line through the remainder of the year.

PharmTech: What percentage of your clients demand serialization and track-and-trace services?

Howell: Most of our clients require serialization for various markets, and we have positioned ourselves to be able to meet all global requirements. A handful of clients have discussed bringing some production back in-house to utilize the internal investments they’ve made.

PharmTech: How have you balanced the need to be flexible, and yet be able to meet global deadlines for serialization?

Howell: Whether they are a large, mid-sized or virtual pharmaceutical company, each client’s expectations and resources for serialization vary considerably. This variation has spurred Patheon’s goal to provide a standard solution that  meets the majority of client’s requirements.

Our solution follows GS-1 standards and provides both serialization and aggregation capabilities. Customization requests are critically examined, as they do require a longer timeline and increased resources, so we have to be cognizant of achieving the greater goal of readiness for all clients when providing solutions for such requests.

PharmTech: Can you give an example of a project that achieved success, what it taught you, and why it worked?

Howell: Our experience to-date has been focused on meeting early market needs, as well as preparing for the much bigger requirements for the DSCSA. Some key lessons learned include: the benefits of standardization, best practice sharing among sites and starting the process early.

With clients in the triple digits, we’ve learned that standardization is the best use of our resources. Customization is expensive and time-consuming, and can detract from core deliverables.

Because our nine sites in North America and the European Union are simultaneously implementing lines, we have a valuable pool of resources from which to share learnings. Additionally, the time for engineering, delivery, installation, and qualification can be extensive. Delivery timelines are increasing as the volume of work grows. Starting early has put us in a good position to learn from the early implementation processes and be ahead of the curve.

PharmTech: Have you been able to quantify and demonstrate ROI for clients through these projects?

Howell: Patheon has partnered with our client base in the capital implementations for serialization. Payback for our investments has been initially modeled during the capital approval process. We will be monitoring project results throughout the network to confirm adherence to these initial models, but it is currently too early to draw conclusions.

PharmTech: What are the most difficult challenges involved with serialization?

Howell: The greatest technical challenge we face is the variety of organizations with which we work. Our clients have varying expectations, system architectures and support vendors. Patheon has selected vendors such as Tracelink, Advanco, and OCS in Europe, as well as ROC IT and Optel in North America. Beyond this level of variety, the next biggest challenge lies in the qualification and validation of these complex systems.

PharmTech: Which national set of regulations is proving the most challenging to meet and why?

Howell: No single set of national regulations poses a particular issue at this point. Rather, it’s the potential variety and expectations for change as we move forward which raises concerns.

As an industry, the more we can drive and lobby for consistency and harmonization in national regulations, the better we’ll be able to achieve our overall societal goals to keep our drug supply chain safe.

PharmTech: What role will standards play in the future?

Howell: The more we can standardize, the easier it will be for us and our clients to meet our overall goals. The use of GS-1 standard requirements wherever possible will simplify implementation, operation, and maintenance of our solutions.

PharmTech: How can pharma clients help ensure the success of serialization programs?

Howell: We’ve mapped out a standard onboarding process for our existing and new clients to follow in transitioning to serialized product. This process involves sharing information such as product and location master data, discussing IT integration, and agreeing on product qualification expectations.

We’ve started the discussion and information sharing with the majority of our clients. For those who haven’t started, the key message would be that it’s time to begin.

In addition, working with your CMO’s standard approach can help to save cost and -- more importantly, time -- during implementation.

PharmTech: Can you give examples of how serialization and track and trace might provide long-term savings?

Howell: Certainly, there are both one time and continuing costs associated with serialization. Initial qualification of the modified packaging process and end-to-end data transfer is a key one-time cost.

Artwork modifications and obsolescence costs could be another cost area. Beyond those one-time costs, we expect to see some increase in unit costs as well. The potential for line speed decreases and additional overhead costs to technically support the packaging process could increase the cost of goods sold (COGS). We will be monitoring this closely as we move forward through the learning curve over the next couple years.

Serialization as a competitive advantage

Asa Wilander, head of customer relations, Recipharm serialization task force

PharmTech: How long have you been working, formally, on serialization and track-and-trace initiatives?

Wilander: Recipharm’s initial project started in May 2013, and afull-scale program was launched in 2014, with the establishment of Recipharm’s serialization task force. A standard solution that will be implemented across our group was defined in 2015, and we are progressing along our journey, which involves investing over $40 million through 2019.

When we launched our full scale serialization program, we had broader track-and-trace goals in mind. The task of defining a standard that would meet all market requirements has been completed, and we are well on our way to meeting track-and-trace goals.

PharmTech: What remains to be done?

Wilander: We have selected SEA Vision and Marchesini as our software and hardware partners for serialization and the deployment plan has been completed. The complete serialization solution will now need to be implemented in 15 of Recipharm’s European locations across more than 70 production lines.

We will also need to ensure the solution is connected to customers’ IT systems. A pilot showcase line is now operational and, starting in October 2016, our customers will be able to view and trial Recipharm’s standard solution for serialization and aggregation.

PharmTech: Are all of your clients demanding serialization and track-and-trace services?

Wilander: Around 85% of Recipharm’s customers will require these services. Some clients believe that it is still too early to start the implementation process and don’t understand the full picture of what needs to be done to be ready for serialization. Our view is that these organizations must face this challenge head on, because changes can take time to implement, particularly in a complex supply chain.

The majority of clients are aware that serialization requires their CMO to make a significant investment and will also take responsibility for their part in the project. That said, we have developed a novel pricing model that aims to reduce the financial burden for our customers.

Recipharm’s pricing structure will see the removal of any upfront investment costs for pharmaceutical companies looking to access our serialization capabilities. Instead, we will spread the cost of serialization across each customer’s on-going supply agreement.

From 2023, we will extend this further, ensuring that serialization is included as standard as part of our product manufacturing costs.

PharmTech: What are the top challenges with serialization?

Wilander: The main technical challenge is related to technical complexity (e.g., the number of lines to equip and the integration of our solution with customers’ IT. ) The non-technical challenges we face include coordinating different customer requirements and ensuring that our customers are on board with our serialization journey. The fact that all market requirements are not yet clearly defined is also a challenge.

PharmTech: How can pharma clients help ensure the success of serialization programs?

Wilander: Pharma clients need to place serialization high on their agendas and ensure they work together with us to clearly define their requirements from an early stage. They also need to provide the necessary information, specifications, and approved artwork in sufficient time.

PharmTech: Which national set of regulations is proving most challenging?

Wilander: The regulations in China and Russia are proving the most challenging at present, mainly due to the unclear requirements and changes over time.

Laying a foundation at Saneca Pharma

Jeremy Drummond, sales and marketing director

PharmTech: How long have you been working, formally, on serialization and track-and-trace initiatives?

Drummond: We have been monitoring trends and authority announcements since we became an independent CDMO in 2014 and started a formal serialization project in 2015. Currently, we do not supply any countries that have introduced serialization (e.g., Argentina, China, or Brazil). We do, however, understand their serialization requirements, and will shortly begin our first supply to South Korea.

PharmTech: What portion of your customer base is demanding serialization and traceability services?

Drummond: All current and potential customers expect us to have a plan in place for ensuring that their packs are serialized. Large pharma customers are well informed and expect us to follow clear requirements that are compatible with their systems. Smaller customers understand that serialization will be required in the near future, and need more support from us to understand the changes required, the implications for their products, and how serialization and traceability will be executed.

PharmTech: What have you found to be the most challenging about serialization and track and trace?

Drummond: Aggregation is a looming requirement in some markets, and is a greater technical challenge than serialization. The greatest non-technical challenge is working with customers to understand each of their unique requirements and cost implications.

PharmTech: Which national set of regulations is proving the most challenging to meet and why?

Drummond: So far, I would have to say Russian regulations. They require aggregation as well as serialization, they aren’t clearly defined, and require rapid implementation.

PharmTech: How can sponsors help ensure success?

Drummond: Pharma clients and CMOs must work together to clearly define requirements for each country where their products are sold. An open and honest discussion must take place early in the process.

Article Details

Pharmaceutical Technology Outsourcing Resources Supplement
Pages: s30–s39

Citation

When referring to this article, please cite it as A. Shanley “Real-World Serialization," Pharmaceutical Technology Outsourcing Resources Supplement 2016.